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Founders: Do not waste money on TechCrunch Disrupt’s Startup Alley

Last month we had 15,000 registered attendees at the LAUNCH Festival and we gave 250 startups free demo pit tables and five tickets each based on merit. The way we did this is, candidly, we don’t make a profit off our event.

Seventy-five percent of the people in the DEMO PIT reported they met an investor (the other 25% certainly did meet an investor, but those investors didn’t uncloak — many, investors, including myself, don’t uncloak at events).

TechCrunch Disrupt has taken my DEMO PIT model — which I came up with 9 years ago — and corrupted it. They are giving their demo pit tables to founders for only one day and they are charging founders $2,000 for two tickets.

If the Startup Alley is open all day, you’re going to pay $300-400 an hour to stand at your table. Not to mention you are going to have to fly to New York City with three people (what it takes to properly have a table), and you’re going to have to put yourself up for four days.

Four thousand dollars (with travel, at least) to do the Startup Alley is a huge waste of resources for your startup. Just think about what else your startup could do with $4,000. If your customer acquisition cost is $5 or $10, you’re going to get a lot more attention from angel investors by emailing them a chart that shows you’ve now got 200 or 400 new customers — trust me, this I know.

Also, the Startup Alley is, largely, the startups that CAN’T RAISE MONEY and who are SO DESPERATE that they have to PAY FOR EXPOSURE.

All of us angel investors understand that the Startup Alley is for the companies that are desperate — and that’s not a judgement. I’ve been desperate myself to get attention many times.

However, you don’t want to put yourself in the middle of a bunch of people who are desperate because it’s a negative signal.

We select our 250 startups for LAUNCH Festival based on merit. It costs us around $250,000 to set up the space and furniture for these 250 startups. You know how we give these tables away for free? We get sponsors! TechCrunch can easily get sponsors, and they do, so what they are doing with the “Startup Alley” is sucking a massive amount of revenue from desperate startups — it’s despicable.

Here is the math: if they have 250 tables sold a day and they sell them all for $2,000 they are making $1.5m off startups during their NYC event.

Don’t fall for it.

It’s a rip off, as is this dream that you’ll get pulled up on stage (which is an idea I came up with as well, for the record!). At LAUNCH Festival we bring 5 startups from the demo pit every day AND we put 150 of the 250 DEMO PIT startups on our AMA Stage. So, for free, we put 165 of the 250 DEMO PITs on one of the two stages.

Founders shouldn’t support conferences like Disrupt, which are designed to rip off founders. Don’t support them, it enables them to do more.

In fact, some group in New York City should rent a huge space and just divide the cost of that space with other founders on the same days as Disrupt New York next year — that would be a very New York City thing to do to the Valley interlopers who are looking to take your money.

What you’ll find is it will be between free — if you get sponsors — and ~$100-200 to do it collectively.